Dutch court orders ex-Action executive to pay €13.5 million in back taxes

A former top executive at discount retail chain Action has been ordered to pay 13.5 million euros to the Dutch tax authority over stock profits he earned while working in the Netherlands, RTL reports. The Amsterdam Court of Appeal ruled that the British former commercial director cannot claim exemption under the expat tax regime, overturning a lower court decision in his favor.

The man, identified by NRC last year as British national Simon Hathway, earned 27 million euros through shares in Action during his tenure from 2013 to 2018. Of that amount, 18.8 million euros came from selling his stake after leaving the company, while nearly 10 million euros was received in dividends over the years.

Hathway had initially claimed eligibility under a scheme allowing foreign employees of Dutch companies to exempt certain income from Dutch taxation. While a lower court ruled in his favor in 2023, the tax authority appealed — and the Court of Appeal has now sided with the Dutch government.

“This ruling contradicts the earlier decision,” Guido de Bont, Hathway’s lawyer, told RTL. “We completely disagree and will likely file for cassation with the Supreme Court.”

Hathway joined Action in early 2013 as commercial director, shortly after the Noord-Holland–based retailer was acquired by the British private equity firm 3i. He invested 1.8 million euros in Action shares upon taking the job — a common practice under private equity ownership to align executives’ financial interests with company performance. The model is known in the investment world as having “skin in the game.”

According to Hathway’s LinkedIn profile, he played “a key role in quadrupling revenue and profit” at Action and oversaw its expansion from 340 stores in four countries to 1,100 stores in seven countries during his five-year tenure.

The case is not isolated. Another former Action executive, Frederik Lotz of Denmark, who served as the company’s chief financial officer for years, is also engaged in a similar dispute with the Dutch tax authorities over high-yield stock earnings.